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Valuing Twitter vs. Facebook: Cheap or Expensive

10/28/2013 10:43AM

Social media users can debate whether Facebook or Twitter is a better place to post a picture of their kid or a snarky comment. Now, investors are having a similar conversation: Which platform offers them a better value for their money? Telis Demos joins MoneyBeat.

This transcript has been automatically generated and may not be 100% accurate.

... social media users can debate whether Facebook or Twitter ... the better place to post a picture of the kit or snarky comment on things but ... now investors are having a similar conversation which platform offers them a better value for their money tellers D most is here to talk about this one ... okay um in in the sum of the ... hypothetical ... on investor aam looking at Twitter looking at Facebook ... where's the better value ... well ... you know you ... right now and what it basically depends on how U S The question right is it a better value today is a better value in the in the long run ... aam depending on the kind of measures that you use this in the inputs that you put in you can come to either answer that's the thing that investors should get dealing with right ... ice I look it whether I see a company that is not making money ... Likud Facebook a few tummy is making money ... why should I go deeper than that of his Twitter might have the potential to grow a lot more in the next couple of years of days but that's right maybe Facebook's making a lot of money come much more money can they make ... each with Twitter you can say ok Economic Mining take the meeting will be making money tomorrow and that might be up a bigger potential growth and so therefore he can put a higher multiple on fees of twenty ten now and the push to have on MoneyBeat you mention a couple of differ ways of measuring this need to run through some of them ... what he think is that we think is the best one we think is the most key ... for people looking at Twitter ahead of its IPO ... well the question is for a lot of these companies is a multiple based on the red beans right see look at their sales me say ok ... how much is it worth based on its Brat ... right it's um it's a it's ... because they don't have in the case with a ton of progress right ... see say ok ... I put whatever I promote won their revenues because I think that it will produce a certain amount of ... profits in the future ... bright and so you can compare ... Facebook and Twitter in you say ok ... you know Facebook is valued at about aam ... asking about the NSA about twenty times its sales ... should Twitter be value route similarly do we think that someday they'll be withdrawn same profits at the same revenues ... that Facebook is so it's kind of thing that professional wrestling ... now I'm you know the the the last thing is its intention right Facebook ... the price that IPO very aggressively seems lead Twitter's taken a little different tack on that ... do you do you think they're doing the smart thing ... well I think that they are being smart about not getting ahead of the expectations that were set for them in the private markets however but something let's be clear this is still a pretty expensive stock in the sense that UBS to pay pretty high multiple on the revenues the